I am currently in a bit of a pickle as I am taking summer classes at a University (at which I am a student), and my father was denied the parent PLUS loan which I was depending on to pay rent and buy food during the summer session. Now I am forced to take out a loan from elsewhere, and I am considering doing so from my bank.

Given that I am not very financially savvy at all, I would like to know the following:

  1. What are the important aspects in taking out a loan from a bank to take into consideration before actually doing so?
  2. Are there areas in which I might run in to trouble down the line that would not occur with a Stafford loan or from elsewhere?
  3. Are there better places to receive a loan from which I should consider first?

Thank you in advance.

  • 2
    I's strongly suggest asking your school's financial aid office They will know what low-rate deferred-payment loans are available to you, possibly including loans through the school or scholarship programs or the school's credit union which might be a better deal than you'd get from your bank. At the very least they can walk you through the process. – keshlam May 22 '15 at 2:21

Some aspects to consider when taking a loan: what is the interest rate, when is the loan due in full, at what point does interest begin to accrue, are there limitations on what the money can be used for, can the bank "call" the loan (demand the full amount) at any time, when must payments begin, what is the minimum payment, is there a penalty for paying the loan off early.

You will also benefit from working while taking classes to help pay expenses. Perhaps more importantly, apply for grants and scholarships (even for small amounts) like it is your second job (second to schoolwork). If you spend 100 hours over a few months applying for 100 scholarships and you receive even $4000 in aid, you just made $40/hour which is more than a part time job will earn you. It's possible to make it through school without debt.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.